SPRINGFIELD – There's a state budget plan circulating Springfield circles that is 1. balanced, 2. hides no tax hikes, and 3. actually makes budget cuts.
We're calling it the "McPlan" budget prescription. Too good to be true, you say?
Republican State Senators Kyle McCarter and Dan McConchie (the Mc's – get it?) are staking their stellar political reputations on what they're calling the "Taxpayer Bargain Budget Plan" in response to Senator Bill Brady's "Grand Bargain Budget" that features an income tax hike to pay bills that are stacking up.
"The plan is very strong medicine for a very sick state," McCarter and McConchie said last week in an op-ed about their proposal. "It forces the Legislature to make tough decisions between needs and wants. The 'Taxpayer Bargain' requires lower spending, with 10% across-the-board cuts at state agencies and departments. It simply asks for a dime of savings for every dollar spent."
Sounds like a place most conservatives would like to see our General Assembly start. And it would take some nose-holding to take the medicine for Democrat as well as Republican lawmakers, public sector union workers, municipality office holders, education staffs and yes, those that depend on government subsidies.
But if we're going to start the path towards sound economic policy, fellow Illinoisans, it will take us all paying taxes to do what must be done to stop the impending catastrophe.
Kudos to McCarter and McConchie for spending their time putting together a reasonable plan. We ask Illinois General Assembly leadership to set this plan in the middle of the negotiation as a place to start. At least it will get them to the table.
The "McPlan's" 7-Point Budget Plan
Balanced Budget –
- Prioritizes spending – by recognizing limited resources and acknowledging challenging cuts
- Protects elementary and secondary education – maintains 100% of General State Aid and mandated categoricals
- Protects Medicaid spending for the most vulnerable
- Maintains public pension payment obligations
Cuts –
- Calls for 10% across-the-board at state agencies and departments, exempting primary and secondary education, Medicaid for the most vulnerable and pension payments.
- Asks each university to reduce spending by 5%
- Reduces discount rate to retailers for Sales Tax collection – (from 1.75% to 1%)
Requires Fiscal Responsibility
- Requires no tax increase
- Disallows any new taxes
- Calls for Executive Branch to manage and includes some of the Governor’s own ideas and Republican Leader Sen. Christine Radogno’s Senate Bill 2063 – “Unbalanced Budget Response Act”
- Calls for Governor to negotiate changes to state employee group health care and AFSCME contract wages
- Imposes a real spending cap tied to legislative salaries. If the General Assembly violates the spending cap, they lose their pay for that fiscal year.
- Borrows $7 billion to pay off past due bills. Could realize savings of $500 million in late charges.
- Requires borrowing to include a spending cap set at the fiscal year revenue level projected by the Illinois Commission on Government Forecasting and Accountability. Any revenue increase over this amount will be distributed as follows: 25% to education 25% for roads & bridges, 10% towards pension debt and 40% to payoff the backlog of unpaid bills.
Modernizes Illinois’ Public Pension Systems –
- Reforms legislator pensions before reforming pensions for other state employees.
- Ends public pensions for all new legislators going forward.
- Keeps promises to current retirees and employees, and protect taxpayers going forward.
- Includes President John Cullerton’s Cost and Consideration plan.
- Moves new state employees to a modern, 401k-style pension plan.
- Shifts Public pension cost to schools, universities and local governments in exchange for financial relief from unfunded state mandates.
- K-12 Pension Cost Shift – 5 year phase-in ($200 million/year – $1 billion after 5 years)
- University Pension Cost Shift – Immediate (Offset by procurement reform and state mandate relief)
- Refinances current pension bonds – interest savings of $800 million goes to paying off old bills.
Medicaid Reforms
- Established a Smart Card Pilot Program
- Steps up prosecution of Vendor Fraud/3rd party vendor verification
- Mandates Drug Screening for Medicaid recipients
- Discontinues taxpayer support for those with criminal warrants
- Adds photo to LINK Card
- Upgrades Medicaid Redetermination Project – Checks recipient status every 3 months instead of current 6 months
- Manages Care Changes
Reforms How Illinois Does Business
- Reduces the Local Government Distributive Fund (money to local governments) by about 4% of their total budget in exchange for financial relief from unfunded state mandates, government consolidation and constitutional amendment to allow “home rule” for smaller communities
- Makes sense of rules for purchasing goods and services – changes procurement
- Changes overtime rules – Increases hiring in Corrections to reduce overtime costs
- Reorganizes state government agencies by blending Historic Preservation Department into Natural Resources
Creates a Stable, Predictable Environment to Attract Job Creators to Illinois –
- Reforms Illinois Workers’ Compensation System as currently being negotiated
- Establishes a new funding formula for schools
- Sets a Permanent Property Tax Freeze on Education only and shifts education funding from the property tax to state government
- Sets up a Sunshine provision requiring copy of property tax bill to mortgagee
- Relieves local governments of some mandates
* For more information go to www.taxpayerbargain.com.
